Friday, February 22, 2013

Scandal-hit Vatican bank tries to make clean start but again stumbles

The Vatican appointed a German lawyer to head its bank,
but the bid to turn the fortunes of the scandal-hit institution was
clouded by his business links to a military shipbuilder.

The appointment, made by a commission of cardinals, was
approved by Pope Benedict and is likely one of his last major decisions
before he resigns at the end of the month, a move he announced last
week, stunning Catholics around the world.

As chairman of the Institute for Works of Religion (IOR), Ernst von
Freyberg will head efforts to improve the image of the Vatican's bank
which is under investigation for money laundering and has been without a
head for nine months.But within minutes of announcing his appointment, the Vatican faced a
new public relations challenge when asked to explain Freyberg's
chairmanship of Blohm + Voss, a Hamburg-based shipbuilder in which he is
a minority shareholder.Reporters asked Vatican spokesman Father Federico Lombardi how the
Church could justify hiring someone who worked for a company with a long
history of making warships, including for Nazi Germany.After initially announcing that the company was no longer involved in
that business, the Vatican later issued a statement saying that, while
Blohm + Voss's main activity was ship repair and luxury yacht making, it
was also “part of a consortium that is building four frigates for the
German navy”.

British buyout firm STAR Capital which bought Blohm + Voss in 2011
from ThyssenKrupp said at the time it was acquiring the non-military
parts of the industrial conglomerate's ship business.Lombardi said the fact that Freyberg organised pilgrimages to the
shrine at Lourdes and was a Knight of Malta - an elite member of a
charitable organisation with roots in the Crusades - was proof he had
the “considerable human and Christian sensibility” needed for his new
role.Freyberg takes a position that has been vacant since May when the
bank's board ousted the then head Ettore Gotti Tedeschi, accusing the
Italian of neglecting his basic management responsibilities.Gotti Tedeschi's unusually abrupt dismissal, along with the arrest of
the pope's butler for stealing confidential papal documents, was the
culmination of a leaks scandal that shook the Vatican and weighed on
Benedict's papacy.The Vatican has been trying to shed its image as a suspect financial
centre since 1982, when Roberto Calvi, an Italian known as “God's
Banker” because of his links to the Vatican, was found hanging from
London's Blackfriars Bridge.

In July, a European anti-money laundering committee said the Vatican
bank failed to meet all its standards on fighting money laundering, tax
evasion and other financial crimes.

The report by Moneyval, a monitoring committee of the 47-nation
Council of Europe, found the Vatican passed nine of 16 “key and core”
aspects of its financial dealings.